SEC: inconsistent treatment

Author: | Published: 1 Jul 2009

Prior to the failure of Lehman Brothers, acceleration of the financial crisis and the change in administration in Washington, we saw a great deal of activity at the US Securities and Exchange Commission (SEC) focused on the globalisation of securities markets and the regulations affecting foreign private issuers. There seemed to be real progress in areas such as the acceptance of IFRS financial statements and cooperation with foreign regulators in investigating insider trading. These advances reflected greater ambitions of mutual recognition between major regulators.

But many of these initiatives took as a premise that free flow of capital globally is fundamentally desirable. Given the excessive risk-taking highlighted by the crisis and the discovery of frauds such as the Madoff scandal, the focus is likely to shift sharply to scrutiny of the risks inherent in some...